Co-Operatise the State?

In the free-for-all over the spoils of the public sector, Tory ministers are playing fast and loose with the concepts of co-operatives and mutuals. They talk blithely about ‘the John Lewis model’. One might smile at the fact that Tories have to raid progressive history, such is the crisis of legitimacy of big business. Rhetorically, one can simply apply the ‘private sector test’. Would ministers apply the right to form a co-op to workers in privatised services, as a recent Unison report proposed? Would the investment managers proclaiming ‘John Lewis style’ academies apply the John Lewis model to private companies?

Genuine co-operative alternatives are making headway. The pressure to marketise grows in parallel with the mounting evidence of failure – the Southern Cross care home operator heads a growing list, as patients, users and medical staff become more confident whistle-blowers – but few want to return to public management as we knew it. There is urgent interest in how to defend public services but managed in a more responsive way.

The co-operative movement, with its practical experience of democratic management, its labour movement traditions and its significant resources through the Co-operative Group (see page 30), is proving a distinctive source of support for alternatives to the marketisation of public services.

In education, a key development is the spread of co-operative trust schools, supported nationally by the Schools Co-operative Society (SCS) and funded through local authorities, which also provide what support services they can on diminishing budgets. There are now 200 co-op schools, with numbers growing rapidly.

Rather than be forced into an academy, schools are looking for alternatives that enable them to realise their public service values. ‘Especially important,’ explains the enthusiastic Mervyn Wilson, head of the Co-operative College, ‘is the way SCS has helped schools develop effective collaboration’ – in dealing with Ofsted inspections, for example, and sharing resources.

Trade unions are becoming warily supportive of the development. SCS is working closely with the unions, which stress the contrast with academies. ‘Academies are about marketisation, whereas co-operative schools maintain education as a public service, funding [it] on the basis of social need,’ says John Chowcat, a leading official in the Prospect union. (The Co-op does sponsor some academies in very specific circumstances, but this is not their main concern.)

What does this mean for local authorities that see the role of the state as both to deliver public services and also to enable the means of delivery to be more responsive to users and staff alike?

Enter the Co-operative Council Network. One of the network’s members is Newcastle Council. Labour councillor Nigel Todd welcomes its formation because it ‘brings the authentic socialist imagination back into the labour movement’. It does so with a stress on opening services to greater involvement from users and staff.

This is what inspires Unison branch secretary and Co-op party member Jonathan Sedgebeer from Telford Council, a new recruit to the network: ‘This is an opportunity to move beyond simply reacting to the Tory agenda [and] setting out our alternative strategy.’ He reflects the position of Unison nationally, which also sees the co-operative model as a basis for intervening in privatised services and helping staff create co-operatives that will improve services as well as wages and working conditions.

‘We are walking a fine line,’ admits Sedgebeer, fully aware that talk of co-ops, mutuals and social enterprises can ‘simply soften the path to privatisation’. Unions, the co-operative movement and councils are exploring ways of locking assets into trust arrangements that prevent private takeovers. They are looking at collaborative – rather than outsourcing – models around very specific services where co-ops or other transparent and accountable social enterprises can improve the service delivery.

‘You work out together what the council and the co-op does best from the point of view of meeting social needs.’ That’s a word of advice from Alison Page, who has six years’ experience of working with Lancaster Council through a recycling company and the charity Furniture Matters. According to the New Economics Foundation assessment of the social return on investment, the partnership has achieved a £5 return on every £1 of public money invested in terms of jobs created in the local economy, the benefits of recycling and savings on landfill.

The word ‘socialism’ in the English language had its origins in the co-operative movement of the 1820s. Its opposite was competitive individualism. In the context of state-promoted competition of wild west proportions, the co-operative movement is opening once again a contested space for developing what socialism means in practice.

Hilary Wainwright is a founding editor of Red Pepper and research director of the New Politics programme at the Transnational Institute (TNI).